Sweden’s Biggest Companies Ignore Borg Push on Gender Quotas

April 4 (Bloomberg) -- Sweden’s largest companies are
ignoring warnings from Finance Minister Anders Borg that he will
impose quotas unless they move quickly to rectify gender
imbalances on their boards.

The female ratio on the boards of the 22 Sweden-based
companies on the Nasdaq OMX Stockholm 30 index that have elected
or proposed their 2014 boards rose to 28.9 percent from 27.6
percent in 2013, according to Bloomberg calculations based on
company statements. Only 7 of the 22 companies improved their
female ratios, while 14 left them unchanged and one saw female
representation decline.

Borg in February said that Sweden’s companies need to look
more carefully at board recruitment this spring and that he
would be forced to enact quotas, following countries such as
Norway, if things continued to move “sideways.”

“I want, of course, to take a look at what the overall
picture of these figures look like and then we must of course
relate to that,” Borg said when confronted yesterday with the
data after a meeting at parliament in Stockholm. “But there
must be a quick increase.”

Most Equal

Borg now plans to sit down with Arne Karlsson, chairman of
the Swedish Corporate Governance Board, and have a talk on “how
this problem can be dealt with,” he said.

Karlsson declined to comment on whether the current ratio
is sufficient, saying the governance board is currently working
on establishing “a common view” on gender equality on boards.

Borg has been trying to lead by example. Some 49 percent of
the members of the boards of companies wholly or partly owned by
the Swedish state are women while 41 percent of the chairmen of
those boards are female, government data shows. The state
targets a ratio of at least 40 percent at its companies.

Swedbank AB and Nordea have the most equal boards among the
companies in the survey. Their ratios improved to 44.4 percent
from 40 percent and 33.3 percent, respectively. Steelmaker SSAB
was the company with the lowest ratio at 11.1 percent, unchanged
from a year earlier.

Sweden has more women in the labor market than any other
European Union country, according to government data, and about
45 percent of elected officials are female. Yet women are still
outnumbered three-to-one on corporate boards, Statistics Sweden
data show. Among the 25 biggest companies, only 22 percent of
senior managers are female, according to Bloomberg calculations.

Owner’s Right

Other countries have introduced quotas that force companies
to have a certain ratio of women on their boards, such as
Norway’s requirement of 40 percent and similar measures in
France and Spain. Investor AB Chief Executive Officer Boerje
Ekholm and SEB CEO Annika Falkengren are among executives that
have spoken out against quotas. Sweden’s Wallenberg family holds
major stakes in both companies.

“The owners have the right to appoint the boards they
regard as right,” Ekholm, whose Investor AB oversees $34
billion in assets with stakes in Ericsson AB, Atlas Copco AB,
Saab AB and Electrolux, said in an interview in March. “That’s
a very important principle for me and I’m therefore opposed to
quota regulation.”

Investor AB proposed an unchanged ratio of 23.1 percent
ahead of its annual general meeting in May. SEB’s board for this
year, approved by shareholders in March, has female
representation of 36.4 percent, up from 33.3 percent.

Research suggests it makes economic sense to add women. A
2006 study from Sweden’s Uppsala University compared earnings of
48 companies and found that those with more female board members
delivered higher profits and showed greater potential to
increase earnings than companies with no women on their boards.
Catalyst, a New York-based research and advocacy group, has
arrived at a similar conclusion for Fortune 500 firms.